FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT of 1934

                  For the quarterly period ended June 30, 2003
   --------------------------------------------------------------------------

                                       OR

             ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT of 1934

For the transition period from _____________________ to _____________________


                             Commission file number
                                     0-21560
                     ---------------------------------------


                            CNL Income Fund XI, Ltd.
-----------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


             Florida                                       59-3078854
---------------------------------              ------------------------------
(State or other jurisdiction of                         (I.R.S. Employer
incorporation or organization)                         Identification No.)


450 South Orange Avenue
Orlando, Florida                                             32801
---------------------------------              ------------------------------
(Address of principal executive offices)                   (Zip Code)


Registrant's telephone number
(including area code)                                  (407) 540-2000
                                               ------------------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period that the  registrant
was  required  to file such  reports),  and (2) has been  subject to such filing
requirements for the past 90 days. Yes X No ____

Indicate  by check mark  whether  the  registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Exchange Act): Yes___ No X



<PAGE>


                                    CONTENTS





                                                                       Page
Part I.

     Item 1.      Financial Statements:

                      Condensed Balance Sheets                          1

                      Condensed Statements of Income                    2

                      Condensed Statements of Partners' Capital         3

                      Condensed Statements of Cash Flows                4

                      Notes to Condensed Financial Statements           5-7

     Item 2.      Management's Discussion and Analysis of Financial
                      Condition and Results of Operations               8-11

     Item 3.      Quantitative and Qualitative Disclosures About
                      Market Risk                                       11

     Item 4.      Controls and Procedures                               11

Part II.

     Other Information                                                  12-13





<PAGE>


                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>

                                                                            June 30,                December 31,
                                                                              2003                      2002
                                                                        ------------------       -------------------

 <c>
                             ASSETS

Real estate properties with operating leases, net                           $  19,475,206             $  19,016,839
Net investment in direct financing leases                                       5,737,840                 6,489,145
Real estate held for sale                                                              --                   553,897
Investment in joint ventures                                                    4,382,901                 4,414,071
Cash and cash equivalents                                                       2,553,761                 1,763,878
Receivables, less allowance for doubtful accounts
    of $131,066 and $23,196, respectively                                          56,522                   230,688
Accrued rental income                                                           1,620,203                 1,715,758
Other assets                                                                      136,567                   135,940
                                                                        ------------------       -------------------

                                                                            $  33,963,000             $  34,320,216
                                                                        ==================       ===================

               LIABILITIES AND PARTNERS' CAPITAL

Accounts payable and accrued expenses                                        $     16,159               $     3,271
Real estate taxes payable                                                          25,222                    15,632
Distributions payable                                                             875,006                 1,075,006
Due to related parties                                                             18,639                    20,101
Rents paid in advance and deposits                                                 85,728                   163,020
                                                                        ------------------       -------------------
    Total liabilities                                                           1,020,754                 1,277,030

Minority interests                                                                507,223                   507,991

Partners' capital                                                              32,435,023                32,535,195
                                                                        ------------------       -------------------

                                                                            $  33,963,000             $  34,320,216
                                                                        ==================       ===================
</TABLE>
           See accompanying notes to condensed financial statements.



<PAGE>


                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>

                                                            Quarter Ended                    Six Months Ended
                                                               June 30,                          June 30,
                                                        2003             2002              2003              2002
                                                    -------------    --------------  -----------------  ---------------

 <c>
Revenues:
    Rental income from operating leases                $ 548,642        $  610,930       $  1,144,552      $ 1,198,094
    Earned income from direct financing leases           189,673           205,313            390,854          417,361
    Contingent rental income                               1,527             7,295              2,831           28,705
    Interest and other income                              3,473             8,251              8,310            9,493
                                                    -------------    --------------  -----------------  ---------------
                                                         743,315           831,789          1,546,547        1,653,653
                                                    -------------    --------------  -----------------  ---------------

Expenses:
    General operating and administrative                  60,957            69,497            138,350          153,464
    Property related                                      14,432            49,981             18,582           58,853
    Management fees to related parties                    11,871            13,132             19,490           23,934
    State and other taxes                                  4,351            10,078             32,354           31,779
    Depreciation                                         100,866            98,806            197,568          198,058
    Provision for write-down of assets                    67,693                --             67,693               --
                                                    -------------    --------------  -----------------  ---------------
                                                         260,170           241,494            474,037          466,088
                                                    -------------    --------------  -----------------  ---------------
Income Before Minority Interests in Income of
    Consolidated Joint Ventures and Equity in
    Earnings of Unconsolidated Joint Ventures            483,145           590,295          1,072,510        1,187,565

Minority Interests in Income of Consolidated
    Joint Ventures                                       (14,380 )         (16,999 )          (29,131 )        (33,441 )

Equity in Earnings of Unconsolidated Joint
    Ventures                                             110,959           584,639            210,494          641,858
                                                    -------------    --------------  -----------------  ---------------

Income from Continuing Operations                        579,724         1,157,935          1,253,873        1,795,982
                                                    -------------    --------------  -----------------  ---------------

Discontinued Operations:
    Income from discontinued operations                       --           259,092             18,006          310,613
    Gain on disposal of discontinued operations               --           442,146            377,961          442,146
                                                    -------------    --------------  -----------------  ---------------
                                                              --           701,238            395,967          752,759
                                                    -------------    --------------  -----------------  ---------------

Net Income                                             $ 579,724       $ 1,859,173       $  1,649,840      $ 2,548,741
                                                    =============    ==============  =================  ===============

Income Per Limited Partner Unit:
    Continuing Operations                               $   0.14         $    0.28         $     0.31        $    0.45
    Discontinued Operations                                   --              0.18               0.10             0.19
                                                    -------------    --------------  -----------------  ---------------

                                                        $   0.14         $    0.46         $     0.41        $    0.64
                                                    =============    ==============  =================  ===============

Weighted Average Number of Limited Partner
    Units Outstanding                                  4,000,000         4,000,000          4,000,000        4,000,000
                                                    =============    ==============  =================  ===============
</TABLE>
           See accompanying notes to condensed financial statements.

<PAGE>


                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL

<TABLE>
<CAPTION>

                                                                           Six Months Ended          Year Ended
                                                                               June 30,             December 31,
                                                                                 2003                   2002
                                                                          --------------------    ------------------

 <c>
General partners:
    Beginning balance                                                           $     242,465          $    242,465
    Net income                                                                             --                    --
                                                                          --------------------    ------------------
                                                                                      242,465               242,465
                                                                          --------------------    ------------------

Limited partners:
    Beginning balance                                                              32,292,730            31,678,628
    Net income                                                                      1,649,840             4,314,126
    Distributions ($0.44 and $0.93 per
       limited partner unit, respectively)                                         (1,750,012 )          (3,700,024 )
                                                                          --------------------    ------------------
                                                                                   32,192,558            32,292,730
                                                                          --------------------    ------------------

Total partners' capital                                                        $   32,435,023         $  32,535,195
                                                                          ====================    ==================
</TABLE>
           See accompanying notes to condensed financial statements.



<PAGE>


                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>

                                                                                       Six Months Ended
                                                                                           June 30,
                                                                                    2003               2002
                                                                               ---------------    ---------------

 <c>
Increase (Decrease) in Cash and Cash Equivalents

    Net Cash Provided by Operating Activities                                    $  1,837,936        $ 2,162,728
                                                                               ---------------    ---------------

    Cash Flows from Investing Activities:
       Proceeds from sale of real estate properties                                   931,858          1,734,373
       Investment in joint ventures                                                        --         (1,839,798 )
       Redemption of certificates of deposit                                               --            211,587
                                                                               ---------------    ---------------
              Net cash provided by investing activities                               931,858            106,162
                                                                               ---------------    ---------------

    Cash Flows from Financing Activities:
       Distributions to limited partners                                           (1,950,012 )       (1,750,012 )
       Distributions to holders of minority interests                                 (29,899 )          (33,762 )
                                                                               ---------------    ---------------
              Net cash used in financing activities                                (1,979,911 )       (1,783,774 )
                                                                               ---------------    ---------------

Net Increase in Cash and Cash Equivalents                                             789,883            485,116

Cash and Cash Equivalents at Beginning of Period                                    1,763,878            993,402
                                                                               ---------------    ---------------

Cash and Cash Equivalents at End of Period                                       $  2,553,761        $ 1,478,518
                                                                               ===============    ===============

Supplemental Schedule of Non-Cash Financing
    Activities:

       Distributions declared and unpaid at end of the
          period                                                                  $   875,006         $  875,006
                                                                               ===============    ===============

</TABLE>
           See accompanying notes to condensed financial statements.



<PAGE>

                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
              Quarters and Six Months Ended June 30, 2003 and 2002


1.       Basis of Presentation:

         The accompanying  unaudited  condensed  financial  statements have been
         prepared in accordance  with the  instructions  to Form 10-Q and do not
         include  all  of the  information  and  note  disclosures  required  by
         generally  accepted  accounting  principles.  The financial  statements
         reflect all adjustments,  consisting of normal  recurring  adjustments,
         which are, in the opinion of the general partners, necessary for a fair
         statement of the results for the interim periods  presented.  Operating
         results for the  quarter and six months  ended June 30, 2003 may not be
         indicative  of the  results  that may be  expected  for the year ending
         December  31, 2003.  Amounts as of December  31, 2002,  included in the
         financial   statements,   have  been  derived  from  audited  financial
         statements as of that date.

         These unaudited financial statements should be read in conjunction with
         the financial statements and notes thereto included in Form 10-K of CNL
         Income Fund XI, Ltd. (the  "Partnership")  for the year ended  December
         31, 2002.

         The  Partnership  accounts for its 85% interest in Denver Joint Venture
         and  its  77.33%  interest  in  CNL/Airport  Joint  Venture  using  the
         consolidation  method.  Minority interests represent the minority joint
         venture   partners'   proportionate   share  of  the   equity   in  the
         Partnership's consolidated joint ventures. All significant intercompany
         accounts and transactions have been eliminated.

         In January  2003,  FASB issued FASB  Interpretation  No. 46 ("FIN 46"),
         "Consolidation  of  Variable  Interest  Entities"  to  expand  upon and
         strengthen  existing  accounting guidance that addresses when a company
         should include the assets, liabilities and activities of another entity
         in  its  financial  statements.   To  improve  financial  reporting  by
         companies  involved  with variable  interest  entities  (more  commonly
         referred  to  as   special-purpose   entities  or   off-balance   sheet
         structures),  FIN  46  requires  that a  variable  interest  entity  be
         consolidated by a company if that company is subject to a majority risk
         of loss from the variable interest  entity's  activities or entitled to
         receive a majority of the entity's  residual  returns or both. Prior to
         FIN 46, a company generally included another entity in its consolidated
         financial  statements  only if it controlled  the entity through voting
         interests.  The consolidation  requirements of FIN 46 apply immediately
         to variable  interest  entities  created after January 31, 2003, and to
         older  entities,  in the first fiscal year or interim period  beginning
         after June 15,  2003.  The general  partners  believe  adoption of this
         standard may result in either  consolidation  or additional  disclosure
         requirements  with respect to the  Partnership's  unconsolidated  joint
         ventures,  which are currently  accounted for under the equity  method.
         However, such consolidation is not expected to significantly impact the
         Partnership's results of operations.

2.       Reclassification:

         Certain  items in the  prior  year's  financial  statements  have  been
         reclassified to conform to 2003 presentation.  These  reclassifications
         had no effect on total partners' capital or net income.

3.       Net Investment in Direct Financing Leases:

         During the quarter and six months ended June 30, 2003, the  Partnership
         recorded a provision for  write-down  of assets of $67,693  relating to
         the  property  in  Yelm,  Washington.  The  provision  represented  the
         difference between the carrying value of the property and its estimated
         fair  value.  The  tenant  of  this  property   experienced   financial
         difficulties, and in March 2003, the Partnership executed a termination
         of the tenant's lease rights,  and the tenant surrendered the premises.
         As a result,  the  Partnership  reclassified  this property from direct
         financing leases to real estate  properties with operating  leases.  No
         loss  on  the  reclassification  of  the  direct  financing  lease  was
         recorded.


<PAGE>


                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
              Quarters and Six Months Ended June 30, 2003 and 2002


4.       Discontinued Operations:

         During 2002, the  Partnership  identified and sold two  properties.  In
         addition,  during the six months ended June 30, 2003,  the  Partnership
         identified  and sold its  property in Abilene,  Texas to the tenant and
         received net sales proceeds of approximately  $931,900,  resulting in a
         gain  of  approximately  $378,000.  The  financial  results  for  these
         properties are reflected as Discontinued Operations in the accompanying
         financial statements.

         The  operating  results of the  discontinued  operations  for the above
         properties are as follows:
<TABLE>
<CAPTION>

                                                       Quarter Ended June 30,           Six Months Ended June 30,
                                                       2003              2002            2003             2002
                                                   -------------    ---------------  --------------  ----------------

 <c>
         Rental revenues                                $    --         $  223,196      $   21,491       $   282,359
         Other income                                        --             39,756              --            39,756
         Expenses                                            --             (3,860 )        (3,485 )         (11,502 )
                                                    -------------    ---------------  --------------  ----------------
         Income from discontinued operations             $   --         $  259,092      $   18,006       $   310,613
                                                   =============    ===============  ==============  ================
</TABLE>

5.       Concentration of Credit Risk:

         The following  schedule  presents total rental revenues from individual
         lessees,  each  representing  more than ten percent of rental  revenues
         (including  the  Partnership's   share  of  rental  revenues  from  the
         unconsolidated    joint   ventures   and   the   properties   held   as
         tenants-in-common with affiliates of the general partners), for each of
         the six months ended June 30:
<TABLE>
<CAPTION>

                                                                             2003               2002
                                                                         --------------    ---------------

 <c>
                 Jack in the Box Inc. and Jack in the Box Eastern
                      Division, L.P.                                         $ 384,037          $ 382,141
                 Golden Corral Corporation                                     228,459            225,776
                 Denny's, Inc. and Denny's Corporation                         223,606                N/A
                 Texas Taco Cabana, LP                                         203,144                N/A
                 Burger King Corporation and BK Acquisition,
                      Inc.                                                         N/A            287,713
</TABLE>

         In addition, the following schedule presents total rental revenues from
         individual  restaurant chains,  each representing more than ten percent
         of  rental  revenues  (including  the  Partnership's  share  of  rental
         revenues from the unconsolidated joint ventures and the properties held
         as tenants-in-common with affiliates of the general partners), for each
         of the six months ended June 30:
<TABLE>
<CAPTION>

                                                                             2003               2002
                                                                         --------------    ---------------

 <c>
                 Jack in the Box                                             $ 384,037          $ 382,141
                 Burger King                                                   311,528            497,309
                 Denny's                                                       280,954            528,987
                 Golden Corral Family Steakhouse Restaurants                   228,459            225,776
                 Taco Cabana                                                   203,144                N/A

</TABLE>


<PAGE>


                            CNL INCOME FUND XI, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
              Quarters and Six Months Ended June 30, 2003 and 2002


5.       Concentration of Credit Risk - Continued:

         The  information   denoted  by  N/A  indicates  that  for  each  period
         presented, the tenant or group of affiliated tenants, and the chain did
         not represent more than ten percent of the  Partnership's  total rental
         revenues.

         Although the Partnership's  properties have some geographical diversity
         in the United States and the Partnership's lessees operate a variety of
         restaurant  concepts,  default by any of these  lessees  or  restaurant
         chains  will  significantly  impact the  results of  operations  of the
         Partnership  if the  Partnership is not able to re-lease the properties
         in a timely manner.




<PAGE>


ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         CNL Income  Fund XI,  Ltd.  (the  "Partnership")  is a Florida  limited
partnership  that was  organized on August 20, 1991 to acquire for cash,  either
directly or through  joint  venture  arrangements,  both newly  constructed  and
existing  restaurants,  as well as properties upon which  restaurants were to be
constructed  (the  "Properties"),  which are leased  primarily  to  operators of
national and regional  fast-food and family-style  restaurant chains. The leases
are, in general, triple-net leases, with the lessees responsible for all repairs
and maintenance, property taxes, insurance, and utilities. The Partnership owned
31 and 32 Properties  directly as of June 30, 2003 and 2002,  respectively.  The
Partnership  also owned eight  Properties  indirectly  through  joint venture or
tenancy in common arrangements as of June 30, 2003 and 2002.

Capital Resources

         Cash from  operating  activities  was $1,837,936 and $2,162,728 for the
six months ended June 30, 2003 and 2002, respectively. The decrease in cash from
operating  activities for the six months ended June 30, 2003, as compared to the
six months  ended June 30,  2002,  was a result of changes in the  Partnership's
income and expenses and changes in working capital.

         Other sources and uses of cash  included the  following  during the six
months ended June 30, 2003.

         In March 2003, the Partnership  sold its Property in Abilene,  Texas to
the tenant and received net sales proceeds of approximately $931,900,  resulting
in a gain of approximately  $378,000.  The Partnership expects to reinvest these
proceeds in an additional Property.

         Cash and cash equivalents of the Partnership increased to $2,553,761 at
June 30, 2003,  from  $1,763,878 at December 31, 2002,  primarily as a result of
the  Partnership  holding  the net  proceeds  from the sale of the  Property  in
Abilene, Texas pending reinvestment in an additional Property. At June 30, 2003,
these funds were primarily held in demand deposit accounts at commercial  banks.
The funds remaining at June 30, 2003, after payment of  distributions  and other
liabilities  will be used to invest in an additional  Property,  and to meet the
Partnership's working capital needs.

Short-Term Liquidity

         The Partnership's  investment strategy of acquiring Properties for cash
and  leasing  them  under  triple-net  leases to  operators  who meet  specified
financial standards minimizes the Partnership's  operating expenses. The general
partners  believe  that the  leases  will  generate  net cash  flow in excess of
operating expenses.

         The Partnership's  short-term liquidity  requirements consist primarily
of the operating expenses of the Partnership.

         The general  partners have the right,  but not the obligation,  to make
additional capital  contributions if they deem it appropriate in connection with
the Partnership's operations.

         The Partnership  generally  distributes cash from operations  remaining
after the payment of operating  expenses of the Partnership,  to the extent that
the general partners  determine that such funds are available for  distribution.
Based on current and anticipated  future cash from  operations,  the Partnership
declared  distributions  to limited  partners of $1,750,012  for each of the six
months ended June 30, 2003 and 2002  ($875,006  for each of the  quarters  ended
June 30, 2003 and 2002).  This  represents  distributions  of $0.44 per unit for
each of the six  months  ended June 30,  2003 and 2002  ($0.22 per unit for each
applicable quarter).  No distributions were made to the general partners for the
six months ended June 30, 2003 and 2002. No amounts  distributed  to the limited
partners  for the six months  ended June 30, 2003 and 2002 are required to be or
have been  treated by the  Partnership  as a return of capital  for  purposes of
calculating   the   limited   partners'   return  on  their   adjusted   capital
contributions. The Partnership intends to continue to make distributions of cash
available for distribution to the limited partners on a quarterly basis.

         Total liabilities of the Partnership,  including distributions payable,
decreased to $1,020,754  at June 30, 2003 from  $1,277,030 at December 31, 2002,
primarily  as a result of the payment of a special  distribution  to the limited
partners  during  the six  months  ended  June 30,  2003,  which was  accrued at
December 31, 2002. The special distribution of $200,000 represented accumulated,
excess operating reserves. The general partners believe that the Partnership has
sufficient cash on hand to meet its current working capital needs.

Long Term Liquidity

         The  Partnership  has no long-term  debt or other  long-term  liquidity
requirements.

Results of Operations

         Total rental revenues were $1,535,406 for the six months ended June 30,
2003, as compared to  $1,615,455  in the same period in 2002, of which  $738,315
and  $816,243  were  earned  during  the  second   quarter  of  2003  and  2002,
respectively.  Rental  revenues during the quarter and six months ended June 30,
2002 were higher primarily  because the Partnership  collected and recognized as
revenues $158,000 in past due rents.  Phoenix Restaurant Group, Inc., the former
tenant of the  Property  in  Abilene,  Texas  ceased  paying  rent and filed for
bankruptcy in 2001.  During April 2002, the bankruptcy  court assigned the lease
to a new tenant, and as a result,  the Partnership  collected the past due rents
from  the  new  tenant.  All  other  lease  terms  remained  unchanged  and  are
substantially the same as the Partnership's other leases.

         During the six months ended June 30, 2002, the  Partnership  provided a
rent  reduction to the tenant of the Property in Yelm,  Washington in the amount
of $16,500. However, the tenant continued having financial difficulties,  and in
March 2003,  although  the tenant  continued to meet its  obligations  under the
terms of this lease,  the  Partnership  executed a  termination  of the tenant's
lease rights,  and the tenant  surrendered  the  premises.  The  restaurant  has
continued to operate under a temporary  lease  agreement with a new tenant until
the negotiations  for a new contract with this lessee are finalized.  During the
quarter  and  six  months  ended  June  30,  2003,  the  Partnership  recognized
approximately  $11,200  in  rental  revenues  related  to this  temporary  lease
agreement.  The Partnership expects that the new tenant will continue to operate
as a Burger King with lease terms  substantially  the same as the  Partnership's
other leases.

         The  decrease in rental  revenues  during the six months ended June 30,
was also due to the fact that during the  quarter and six months  ended June 30,
2003, the Partnership stopped recording rental revenues relating to the Property
in Dayton, Ohio whose tenant experienced  financial  difficulties.  In addition,
Denver  Joint  Venture,  in which the  Partnership  owns an 85%  interest,  also
stopped  recording  rental revenues  because the tenant of the Property owned by
this joint venture  experienced  financial  difficulties.  The Partnership  will
continue to pursue collection of these past due rents.

         During the six months ended June 30, 2003 and 2002, the Partnership and
its consolidated joint ventures also earned $2,831 and $28,705, respectively, in
contingent rental income from the Partnership's  Properties, of which $1,527 and
$7,295 were earned during the second quarter of 2003 and 2002, respectively. The
decrease in contingent  rental income during the six months ended June 30, 2003,
as compared to the same period in 2002,  was due to a reduction  in the reported
gross sales of the  restaurants  as  compared  to the same  period in 2002.  The
decrease in contingent  rental income during the six months ended June 30, 2003,
was also due to the Partnership not recording  contingent  rents relating to the
Properties in Dayton,  Ohio and Roswell,  New Mexico,  whose tenants experienced
financial  difficulties.  The Partnership will continue to pursue the collection
of the past due contingent rents.

         During the six months  ended June 30,  2003 and 2002,  the  Partnership
earned $210,494 and $641,858, respectively, attributable to net income earned by
unconsolidated joint ventures, of which $110,959 and $584,639 were earned during
the  second  quarter  of 2003 and  2002,  respectively.  Net  income  earned  by
unconsolidated  joint ventures  during the quarter and six months ended June 30,
2002 was higher partially because in June 2002, Ashland Joint Venture,  in which
the  Partnership  owns a 62.16%  interest,  sold its  Property in  Ashland,  New
Hampshire,  to the tenant and recognized a gain of approximately  $500,900.  The
Partnership  recognized  its  pro-rata  share of this  gain.  The joint  venture
reinvested  the majority of the net sales  proceeds from this sale in a Property
in San Antonio, Texas.

         Net income earned by  unconsolidated  joint ventures during the quarter
and six  months  ended  June 30,  2002 was also  higher  partially  because  the
Partnership and an affiliate, as tenants-in-common,  collected and recognized as
revenues $309,700 in past due rents.  Phoenix Restaurant Group, Inc., the former
tenant of the  Property  in Corpus  Christi  in which  the  Partnership  owns an
approximate  73% interest,  ceased paying rent and filed for bankruptcy in 2001.
During April 2002, the bankruptcy  court assigned the lease to a new tenant,  an
affiliate  of the  general  partners,  and as a result,  the  tenancy  in common
collected the past due rents from the new tenant. All other lease terms remained
unchanged and are substantially the same as the Partnership's other leases.

         The  decrease in net income  earned by  unconsolidated  joint  ventures
during the quarter and six months ended June 30, 2003 was  partially  offset due
to the Partnership  reinvesting the majority of the net sales proceeds, from the
sales of the  Properties in Columbus,  Ohio and East Detroit,  Michigan,  in two
Properties, one in Universal City and the other in Schertz, Texas. Each Property
is held as a separate  tenancy-in-common  arrangement  with CNL Income  Fund VI,
Ltd., a Florida limited partnership and affiliate of the general partners.

         During the six months ended June 30,  2003,  four lessees (or groups of
affiliated lessees) of the Partnership and its consolidated joint ventures,  (i)
Jack in the Box Inc.  and Jack in the Box  Eastern  Division,  L.P.  (which  are
affiliated entities under common control)  (hereinafter  referred to as "Jack in
the Box Inc."), (ii) Golden Corral Corporation,  (iii) Denny's, Inc. and Denny's
Corporation  (which are affiliated  entities under common control)  (hereinafter
referred  to  as  "Denny's,  Inc."),  and  (iv)  Texas  Taco  Cabana,  LP,  each
contributed more than 10% of the Partnership's  total rental revenues (including
rental revenues from the  Partnership's  consolidated  joint  ventures,  and the
Partnership's  share of rental revenues from Properties owned by  unconsolidated
joint ventures and Properties  owned with affiliates of the general  partners as
tenants-in-common). It is anticipated that, based on the minimum rental payments
required by the leases,  these four  lessees (or groups of  affiliated  lessees)
each will continue to contribute more than 10% of the Partnership's total rental
revenues. In addition during the six months ended June 30, 2003, five restaurant
chains, Jack in the Box, Burger King,  Denny's,  Golden Corral Family Steakhouse
Restaurants ("Golden Corral"), and Taco Cabana, each accounted for more than 10%
of the Partnership's  total rental revenues  (including rental revenues from the
Partnership's consolidated joint ventures, and the Partnership's share of rental
revenues from Properties owned by  unconsolidated  joint ventures and Properties
owned with  affiliates  of the  general  partners as  tenants-in-common).  It is
anticipated that these five restaurant  chains each will continue to account for
more  than  10%  of  the  Partnership's  total  rental  revenues  to  which  the
Partnership  is  entitled  under the terms of the  leases.  Any failure of these
lessees or restaurant chains will materially affect the Partnership's results of
operations if the Partnership is not able to re-lease the Properties in a timely
manner.

         Operating expenses, including depreciation and provision for write-down
of assets, were $474,037 and $466,088 for the six months ended June 30, 2003 and
2002,  respectively,  of which  $260,170 and $241,494 were  incurred  during the
second  quarter  of 2003 and  2002,  respectively.  The  increase  in  operating
expenses during the quarter and six months ended June 30, 2003 was primarily due
to the recording of a provision for write-down of assets of $67,693  relating to
the Property in Yelm,  Washington.  The  provision  represented  the  difference
between the carrying  value of the Property and its  estimated  fair value.  The
tenant of this Property experienced financial  difficulties,  and in March 2003,
the  Partnership  executed  a  termination  of the  tenant's  lease  rights,  as
described above.

         The increase  during the six months  ended June 30, 2003 was  partially
offset by a decrease  in the costs  incurred  for  administrative  expenses  for
servicing  the  Partnership  and its  Properties  and a  decrease  in legal fees
relating  to tenants  who were  experiencing  financial  difficulties.  Property
related  expenses  were  higher  in 2002  because  the  Partnership  elected  to
reimburse the tenant of the Properties in Oklahoma  City,  Oklahoma and McAllen,
Texas for certain renovation costs.

         During the year ended December 31, 2002, the Partnership identified and
sold two  Properties  that were  classified  as  Discontinued  Operations in the
accompanying financial statements. In June 2002, the Partnership sold its Burger
King  properties  in Columbus,  Ohio and East Detroit,  Michigan,  to the tenant
resulting  in a gain of  approximately  $442,100.  In  addition,  during the six
months ended June 30, 2003, the Partnership  identified and sold its Property in
Abilene, Texas resulting in a gain of approximately  $378,000. This Property was
also  classified  as  Discontinued  Operations  in  the  accompanying  financial
statements.  The Partnership  recognized net rental income (rental revenues less
Property  related  expenses) of $259,092 and $310,613 during the quarter and six
months ended June 30, 2002,  respectively,  relating to these three  Properties.
The  Partnership  recognized  net rental income of $18,006 during the six months
ended June 30, 2003, relating to the Property in Abilene, Texas.

         In January  2003,  FASB issued FASB  Interpretation  No. 46 ("FIN 46"),
"Consolidation  of Variable  Interest  Entities"  to expand upon and  strengthen
existing  accounting  guidance that  addresses when a company should include the
assets,   liabilities   and  activities  of  another  entity  in  its  financial
statements.  To improve financial  reporting by companies involved with variable
interest  entities (more  commonly  referred to as  special-purpose  entities or
off-balance sheet  structures),  FIN 46 requires that a variable interest entity
be  consolidated  by a company if that company is subject to a majority  risk of
loss from the variable  interest  entity's  activities  or entitled to receive a
majority of the entity's  residual  returns or both.  Prior to FIN 46, a company
generally included another entity in its consolidated  financial statements only
if  it  controlled  the  entity  through  voting  interests.  The  consolidation
requirements of FIN 46 apply  immediately to variable  interest entities created
after  January 31,  2003,  and to older  entities,  in the first  fiscal year or
interim  period  beginning  after June 15, 2003.  The general  partners  believe
adoption  of this  standard  may result in either  consolidation  or  additional
disclosure  requirements with respect to the Partnership's  unconsolidated joint
ventures,  which are currently  accounted for under the equity method.  However,
such  consolidation  is not expected to significantly  impact the  Partnership's
results of operations.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Not applicable.


ITEM 4.  CONTROLS AND PROCEDURES

         The  general  partners  maintain  a  set  of  disclosure  controls  and
procedures  designed to ensure that information  required to be disclosed in the
Partnership's  filings  under the  Securities  Exchange Act of 1934 is recorded,
processed,  summarized  and reported  within the time  periods  specified in the
Securities and Exchange  Commission's  rules and forms. The principal  executive
and  financial  officers of the  corporate  general  partner have  evaluated the
Partnership's  disclosure  controls and  procedures  as of the end of the period
covered  by this  Quarterly  Report on Form 10-Q and have  determined  that such
disclosure controls and procedures are effective.

         There was no change in internal  control over financial  reporting that
occurred during the most recent fiscal quarter that has materially affected,  or
is  reasonably  likely to materially  affect,  internal  control over  financial
reporting.


<PAGE>


                           PART II. OTHER INFORMATION


Item 1.     Legal Proceedings.   Inapplicable.
            -----------------

Item 2.     Changes in Securities.  Inapplicable.
            ---------------------

Item 3.     Defaults upon Senior Securities.  Inapplicable.
            -------------------------------

Item 4.     Submission of Matters to a Vote of Security Holders.  Inapplicable.
            ---------------------------------------------------

Item 5.     Other Information.  Inapplicable.
            -----------------

Item 6.     Exhibits and Reports on Form 8-K.

            (a)  Exhibits

                    3.1   Affidavit and  Certificate  of Limited  Partnership of
                          CNL Income Fund XI, Ltd.  (Included  as Exhibit 3.2 to
                          Registration  Statement No.  33-43278 on Form S-11 and
                          incorporated herein by reference.)

                    4.1   Affidavit and  Certificate  of Limited  Partnership of
                          CNL Income Fund XI, Ltd.  (Included  as Exhibit 3.2 to
                          Registration  Statement No.  33-43278 on Form S-11 and
                          incorporated herein by reference.)

                    4.2   Amended and Restated Agreement of Limited  Partnership
                          of CNL Income Fund XI, Ltd.  (Included  as Exhibit 4.2
                          to Form 10-K filed with the  Securities  and  Exchange
                          Commission on April 15, 1993, and incorporated  herein
                          by reference.)

                    10.1  Management  Agreement between CNL Income Fund XI, Ltd.
                          and CNL Investment  Company  (Included as Exhibit 10.1
                          to Form 10-K filed with the  Securities  and  Exchange
                          Commission on April 15, 1993, and incorporated  herein
                          by reference.)

                    10.2  Assignment of Management Agreement from CNL Investment
                          Company  to  CNL  Fund  Advisors,  Inc.  (Included  as
                          Exhibit  10.2 to Form 10-K filed  with the  Securities
                          and  Exchange   Commission  on  March  30,  1995,  and
                          incorporated herein by reference.)

                    10.3  Assignment  of  Management  Agreement  from CNL Income
                          Fund  Advisors,   Inc.  to  CNL  Fund  Advisors,  Inc.
                          (Included  as Exhibit 10.3 to Form 10-K filed with the
                          Securities  and Exchange  Commission on April 1, 1996,
                          and incorporated herein by reference.)

                    10.4  Assignment  of  Management  Agreement  from  CNL  Fund
                          Advisors,  Inc. to CNL APF Partners,  LP. (Included as
                          Exhibit  10.4 to Form 10-Q filed  with the  Securities
                          and  Exchange  Commission  on  August  14,  2001,  and
                          incorporated herein by reference.)

                    10.5  Assignment  of  Management   Agreement  from  CNL  APF
                          Partners,  LP to CNL Restaurants XVIII, Inc. (Included
                          as Exhibit 10.5 to Form 10-Q filed with the Securities
                          and  Exchange  Commission  on  August  14,  2002,  and
                          incorporated herein by reference.)

                    31.1  Certification of Chief Executive  Officer of Corporate
                          General  Partner  Pursuant  to Rule  13a-14 as Adopted
                          Pursuant to Section 302 of the  Sarbanes-Oxley  Act of
                          2002. (Filed herewith.)

                    31.2  Certification of Chief Financial  Officer of Corporate
                          General  Partner  Pursuant  to Rule  13a-14 as Adopted
                          Pursuant to Section 302 of the  Sarbanes-Oxley  Act of
                          2002. (Filed herewith.)

                    32.1  Certification of Chief Executive  Officer of Corporate
                          General Partner Pursuant to 18 U.S.C.  Section 1350 as
                          Adopted Pursuant to Section 906 of the  Sarbanes-Oxley
                          Act of 2002. (Filed herewith.)

                    32.2  Certification of Chief Financial  Officer of Corporate
                          General Partner Pursuant to 18 U.S.C.  Section 1350 as
                          Adopted Pursuant to Section 906 of the  Sarbanes-Oxley
                          Act of 2002. (Filed herewith.)

            (b)  Reports on Form 8-K

                 No reports on Form 8-K were filed during the quarter ended June
                 30, 2003.



<PAGE>




                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended,  the  registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

         DATED this 8th day of August, 2003.


                                         CNL INCOME FUND XI, LTD.

                                         By: CNL REALTY CORPORATION
                                             General Partner


                                             By:/s/ James M. Seneff, Jr.
                                                -----------------------------
                                                JAMES M. SENEFF, JR.
                                                Chief Executive Officer
                                                (Principal Executive Officer)


                                             By:/s/ Robert A. Bourne
                                                -----------------------------
                                                ROBERT A. BOURNE
                                                President and Treasurer
                                                (Principal Financial and
                                                Accounting Officer)



<PAGE>


                                  EXHIBIT INDEX


Exhibit Number

            (c)  Exhibits

                   3.1    Affidavit and  Certificate  of Limited  Partnership of
                          CNL Income Fund XI, Ltd.  (Included  as Exhibit 3.2 to
                          Registration  Statement No.  33-43278 on Form S-11 and
                          incorporated herein by reference.)

                   4.1    Affidavit and  Certificate  of Limited  Partnership of
                          CNL Income Fund XI, Ltd.  (Included  as Exhibit 3.2 to
                          Registration  Statement No.  33-43278 on Form S-11 and
                          incorporated herein by reference.)

                   4.2    Amended and Restated Agreement of Limited  Partnership
                          of CNL Income Fund XI, Ltd.  (Included  as Exhibit 4.2
                          to Form 10-K filed with the  Securities  and  Exchange
                          Commission on April 15, 1993, and incorporated  herein
                          by reference.)

                   10.1   Management  Agreement between CNL Income Fund XI, Ltd.
                          and CNL Investment  Company  (Included as Exhibit 10.1
                          to Form 10-K filed with the  Securities  and  Exchange
                          Commission on April 15, 1993, and incorporated  herein
                          by reference.)

                   10.2   Assignment of Management Agreement from CNL Investment
                          Company  to  CNL  Fund  Advisors,  Inc.  (Included  as
                          Exhibit  10.2 to Form 10-K filed  with the  Securities
                          and  Exchange   Commission  on  March  30,  1995,  and
                          incorporated herein by reference.)

                   10.3   Assignment  of  Management  Agreement  from CNL Income
                          Fund  Advisors,   Inc.  to  CNL  Fund  Advisors,  Inc.
                          (Included  as Exhibit 10.3 to Form 10-K filed with the
                          Securities  and Exchange  Commission on April 1, 1996,
                          and incorporated herein by reference.)

                   10.4   Assignment  of  Management  Agreement  from  CNL  Fund
                          Advisors,  Inc. to CNL APF  Partners,  LP (Included as
                          Exhibit  10.4 to Form 10-Q filed  with the  Securities
                          and  Exchange  Commission  on  August  14,  2001,  and
                          incorporated herein by reference.)

                   10.5   Assignment  of  Management   Agreement  from  CNL  APF
                          Partners,  LP to CNL Restaurants XVIII, Inc. (Included
                          as Exhibit 10.5 to Form 10-Q filed with the Securities
                          and  Exchange  Commission  on  August  14,  2002,  and
                          incorporated herein by reference.)

                   31.1   Certification of Chief Executive  Officer of Corporate
                          General  Partner  Pursuant  to Rule  13a-14 as Adopted
                          Pursuant to Section 302 of the  Sarbanes-Oxley  Act of
                          2002. (Filed herewith.)

                   31.2   Certification of Chief Financial  Officer of Corporate
                          General  Partner  Pursuant  to Rule  13a-14 as Adopted
                          Pursuant to Section 302 of the  Sarbanes-Oxley  Act of
                          2002. (Filed herewith.)

                   32.1   Certification of Chief Executive  Officer of Corporate
                          General Partner Pursuant to 18 U.S.C.  Section 1350 as
                          Adopted Pursuant to Section 906 of the  Sarbanes-Oxley
                          Act of 2002. (Filed herewith.)

                   32.2   Certification of Chief Financial  Officer of Corporate
                          General Partner Pursuant to 18 U.S.C.  Section 1350 as
                          Adopted Pursuant to Section 906 of the  Sarbanes-Oxley
                          Act of 2002. (Filed herewith.)


<PAGE>



                                  EXHIBIT 31.1

<PAGE>


                                  EXHIBIT 31.2

<PAGE>


                                  EXHIBIT 32.1


<PAGE>



                                  EXHIBIT 32.2